The Possibility of Social Choice†
By AMARTYA SEN*
“A camel,” it has been said, “is a horse designed by a committee.” This might sound like
a telling example of the terrible deficiencies of
committee decisions, but it is really much too
mild an indictment. A camel may not have the
speed of a horse, but it is a very useful and
harmonious animal—well coordinated to travel
long distances without food and water. A committee that tries to reflect the diverse wishes of
its different members in designing a horse could
very easily end up with something far less
congruous: perhaps a centaur of Greek mythology, half a horse and half something else—a
mercurial creation combining savagery with
confusion.
The difficulty that a small committee experiences may be only greater when it comes to
decisions of a sizable society, reflecting the
choices “of the people, by the people, for the
people.” That, broadly speaking, is the subject
of “social choice,” and it includes within its
capacious frame various problems with the
common feature of relating social judgments
and group decisions to the views and interests of
the individuals who make up the society or the
group. If there is a central question that can be
seen as the motivating issue that inspires social
choice theory, it is this: how can it be possible
to arrive at cogent aggregative judgments about
the society (for example, about “social welfare,”
or “the public interest,” or “aggregate poverty”),
given the diversity of preferences, concerns, and
predicaments of the different individuals within
the society? How can we find any rational basis
for making such aggregative judgements as “the
society prefers this to that,” or “the society
should choose this over that,” or “this is socially
right”? Is reasonable social choice at all possible, especially since, as Horace noted a long
time ago, there may be “as many preferences as
there are people”?
I. Social Choice Theory
In this lecture, I shall try to discuss some
challenges and foundational problems faced by
social choice theory as a discipline.1 The immediate occasion for this lecture is, of course, an
award, and I am aware that I am expected to
discuss, in one form or another, my own work
associated with this event (however immodest
that attempt might otherwise have been). This I
will try to do, but it is, I believe, also a plausible
occasion to address some general questions
about social choice as a discipline—its content,
relevance, and reach—and I intend to seize this
opportunity. The Royal Swedish Academy of
Sciences referred to “welfare economics” as the
general field of my work for which the award
was given, and separated out three particular
areas: social choice, distribution, and poverty.
While I have indeed been occupied, in various
ways, with these different subjects, it is social
choice theory, pioneeringly formulated in its
modern form by Arrow (1951),2 that provides a
general approach to the evaluation of, and
choice over, alternative social possibilities (including inter alia the assessment of social welfare, inequality, and poverty). This I take to be
†
This article is the lecture Amartya Sen delivered in
Stockholm, Sweden, December 8, 1998, when he received
the Alfred Nobel Memorial Prize in Economic Sciences.
The article is copyright © The Nobel Foundation 1998 and
is published here with the permission of the Nobel Foundation.
* The Master’s Lodge, Trinity College, Cambridge, CB2
1TQ, England. For helpful comments and suggestions, I am
most grateful to Sudhir Anand, Kenneth Arrow, Tony Atkinson, Emma Rothschild, and Kotaro Suzumura. I have
also benefited from discussions with Amiya Bagchi, Pranab
Bardhan, Kaushik Basu, Angus Deaton, Rajat Deb, Jean
Drèze, Bhaskar Dutta, Jean-Paul Fitoussi, James Foster,
Siddiq Osmani, Prasanta Pattanaik, and Tony Shorrocks.
1
This is, obviously, not a survey of social choice theory
and there is no attempt here to scan the relevant literature.
Overviews can be found in Alan M. Feldman (1980), Prasanta K. Pattanaik and Maurice Salles (1983), Kotaro Suzumura (1983), Peter J. Hammond (1985), Jon Elster and
Aanund Hylland (1986), Sen (1986a), David Starrett (1988),
Dennis C. Mueller (1989), and more extensively in Kenneth
J. Arrow et al. (1997).
2
See also Arrow (1950, 1951, 1963).
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reason enough for primarily concentrating on
social choice theory in this Nobel lecture.
Social choice theory is a very broad discipline, covering a variety of distinct questions,
and it may be useful to mention a few of the
problems as illustrations of its subject matter
(on many of which I have been privileged to
work). When would majority rule yield unambiguous and consistent decisions? How can we
judge how well a society as a whole is doing in
the light of the disparate interests of its different
members? How do we measure aggregate poverty in view of the varying predicaments and
miseries of the diverse people that make up the
society? How can we accommodate rights and
liberties of persons while giving adequate recognition to their preferences? How do we appraise social valuations of public goods such as
the natural environment, or epidemiological security? Also, some investigations, while not
directly a part of social choice theory, have been
helped by the understanding generated by the
study of group decisions (such as the causation
and prevention of famines and hunger, or the
forms and consequences of gender inequality,
or the demands of individual freedom seen as a
“social commitment”). The reach and relevance
of social choice theory can be very extensive
indeed.
II. Origins of Social Choice Theory and
Constructive Pessimism
How did the subject of social choice theory
originate? The challenges of social decisions
involving divergent interests and concerns have
been explored for a long time. For example,
Aristotle in ancient Greece and Kautilya in ancient India, both of whom lived in the fourth
century B.C., explored various constructive possibilities in social choice in their books respectively entitled Politics and Economics.3
However, social choice theory as a systematic
3
“Arthashastra,” the Sanskrit word (the title of Kautilya’s book), is best translated literally as “Economics,” even
though he devoted much space to investigating the demands
of statecraft in a conflictual society. English translations of
Aristotle’s Politics and Kautilya’s Arthashastra can be
found respectively in E. Barker (1958) and L. N. Rangarajan
(1987). On the interesting medieval European writings on
these issues see, for example, Ian McLean (1990).
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discipline first came into its own around the time
of the French Revolution. The subject was pioneered by French mathematicians in the late eighteenth century, such as J. C. Borda (1781) and
Marquis de Condorcet (1785), who addressed
these problems in rather mathematical terms and
who initiated the formal discipline of social choice
in terms of voting and related procedures. The
intellectual climate of the period was much influenced by European Enlightenment, with its interest in reasoned construction of social order.
Indeed, some of the early social choice theorists,
most notably Condorcet, were also among the
intellectual leaders of the French Revolution.
The French Revolution, however, did not
usher in a peaceful social order in France. Despite its momentous achievements in changing
the political agenda across the whole world, in
France itself it not only produced much strife
and bloodshed, it also led to what is often
called, not inaccurately, a “reign of terror.” Indeed, many of the theorists of social coordination, who had contributed to the ideas behind
the Revolution, perished in the flames of the
discord that the Revolution itself unleashed
(this included Condorcet who took his own life
when it became quite likely that others would
do it for him). Problems of social choice, which
were being addressed at the level of theory and
analysis, did not wait, in this case, for a peacefully intellectual resolution.
The motivation that moved the early social
choice theorists included the avoidance of both
instability and arbitrariness in arrangements for
social choice. The ambitions of their work focused on the development of a framework for
rational and democratic decisions for a group,
paying adequate attention to the preferences and
interests of all its members. However, even the
theoretical investigations typically yielded
rather pessimistic results. They noted, for example, that majority rule can be thoroughly
inconsistent, with A defeating B by a majority,
B defeating C also by a majority, and C in turn
defeating A, by a majority as well.4
4
See Condorcet (1785). There are many commentaries
on these analyses, including Arrow (1951), Duncan Black
(1958), William V. Gehrlein (1983), H. Peyton Young
(1988), and McLean (1990). On the potential ubiquity of
inconsistency in majority voting, see Richard D. McKelvey
(1979) and Norman J. Schofield (1983).
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A good deal of exploratory work (often,
again, with pessimistic results) continued in Europe through the nineteenth century. Indeed,
some very creative people worked in this area
and wrestled with the difficulties of social
choice, including Lewis Carroll, the author of
Alice in Wonderland (under his real name, C. L.
Dodgson, 1874, 1884).
When the subject of social choice was revived
in the twentieth century by Arrow (1951), he too
was very concerned with the difficulties of group
decisions and the inconsistencies to which they
may lead. While Arrow put the discipline of social
choice in a structured—and axiomatic—framework (thereby leading to the birth of social choice
theory in its modern form), he deepened the preexisting gloom by establishing an astonishing—
and apparently pessimistic—result of ubiquitous
reach.
Arrow’s (1950, 1951, 1963) “impossibility
theorem” (formally, the “General Possibility
Theorem”) is a result of breathtaking elegance
and power, which showed that even some very
mild conditions of reasonableness could not be
simultaneously satisfied by any social choice
procedure, within a very wide family. Only a
dictatorship would avoid inconsistencies, but
that of course would involve: (1) in politics, an
extreme sacrifice of participatory decisions, and
(2) in welfare economics, a gross inability to be
sensitive to the heterogeneous interests of a
diverse population. Two centuries after the
flowering of the ambitions of social rationality,
in Enlightenment thinking and in the writings of
the theorists of the French Revolution, the subject seemed to be inescapably doomed. Social
appraisals, welfare economic calculations, and
evaluative statistics would have to be, it
seemed, inevitably arbitrary or unremediably
despotic.
Arrow’s “impossibility theorem” aroused immediate and intense interest (and generated a
massive literature in response, including many
other impossibility results).5 It also led to the
5
By varying the axiomatic structure, related impossibility results can also be obtained. Examples can be found in
Arrow (1950, 1951, 1952, 1963), Julian H. Blau (1957,
1972, 1979), Bengt Hansson (1969a, b, 1976), Tapas Majumdar (1969, 1973), Sen (1969, 1970a, 1986b, 1993a,
1995a), Pattanaik (1971, 1973, 1978), Andreu Mas-Collel
and Hugo Sonnenschein (1972), Thomas Schwartz (1972,
351
diagnosis of a deep vulnerability in the subject
that overshadowed Arrow’s immensely important constructive program of developing a systematic social choice theory that could actually
work.
III. Welfare Economics and Obituary Notices
Social choice difficulties apply to welfare
economics with a vengeance. By the middle
1960’s, William Baumol (1965) judiciously remarked that “statements about the significance
of welfare economics” had started having “an
ill-concealed resemblance to obituary notices”
(p. 2). This was certainly the right reading of the
prevailing views. But, as Baumol himself noted,
we have to assess how sound these views were.
We have, especially, to ask whether the pessimism associated with Arrovian structures in
social choice theory must be seen to be devastating for welfare economics as a discipline.
As it happens, traditional welfare economics,
which had been developed by utilitarian economists (such as Francis T. Edgeworth, 1881;
Alfred Marshall, 1890; Arthur C. Pigou, 1920),
had taken a very different track from the voteoriented social choice theory. It took inspiration
not from Borda (1781) or Condorcet (1785), but
from their contemporary, Jeremy Bentham
(1789). Bentham had pioneered the use of utilitarian calculus to obtain judgments about the
social interest by aggregating the personal interests of the different individuals in the form of
their respective utilities.
Bentham’s concern—and that of utilitarianism in general—was with the total utility of a
community. This was irrespective of the distribution of that total, and in this there is an
1986), Peter C. Fishburn (1973, 1974), Allan F. Gibbard
(1973), Donald J. Brown (1974, 1975), Ken Binmore (1975,
1994), Salles (1975), Mark A. Satterthwaite (1975), Robert
Wilson (1975), Rajat Deb (1976, 1977), Suzumura (1976a,
b, 1983), Blau and Deb (1977), Jerry S. Kelly (1978, 1987),
Douglas H. Blair and Robert A. Pollak (1979, 1982), JeanJacques Laffont (1979), Bhaskar Dutta (1980), Graciela
Chichilnisky (1982a, b), David M. Grether and Charles R.
Plott (1982), Chichilnisky and Geoffrey Heal (1983), Hervé
Moulin (1983), Pattanaik and Salles (1983), David Kelsey
(1984a, b), Bezalel Peleg (1984), Hammond (1985, 1997),
Mark A. Aizerman and Fuad T. Aleskerov (1986), Schofield
(1996), and Aleskerov (1997), among many other contributions.
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informational limitation of considerable ethical
and political importance. For example, a person
who is unlucky enough to have a uniformly
lower capability to generate enjoyment and utility out of income (say, because of a handicap)
would also be given, in the utilitarian ideal
world, a lower share of a given total. This is a
consequence of the single-minded pursuit of
maximizing the sum-total of utilities (on the
peculiar consequences of this unifocal priority,
see Sen, 1970a, 1973a; John Rawls, 1971;
Claude d’Aspremont and Louis Gevers, 1977).
However, the utilitarian interest in taking comparative note of the gains and losses of different
people is not in itself a negligible concern. And
this concern makes utilitarian welfare economics deeply interested in using a class of information—in the form of comparison of utility
gains and losses of different persons—with
which Condorcet and Borda had not been directly involved.
Utilitarianism has been very influential in
shaping welfare economics, which was dominated for a long time by an almost unquestioning adherence to utilitarian calculus. But by the
1930’s utilitarian welfare economics came under severe fire. It would have been quite natural
to question (as Rawls [1971] would masterfully
do in formulating his theory of justice) the utilitarian neglect of distributional issues and its
concentration only on utility sum-totals in a
distribution-blind way. But that was not the
direction in which the antiutilitarian critiques
went in the 1930’s and in the decades that
followed. Rather, economists came to be persuaded by arguments presented by Lionel Robbins and others (deeply influenced by “logical
positivist” philosophy) that interpersonal comparisons of utility had no scientific basis: “Every mind is inscrutable to every other mind and
no common denominator of feelings is possible” (Robbins, 1938 p. 636). Thus, the
epistemic foundations of utilitarian welfare
economics were seen as incurably defective.
There followed attempts to do welfare economics on the basis of the different persons’
respective orderings of social states, without
any interpersonal comparisons of utility gains
and losses (nor, of course, any comparison of
the total utilities of different persons, which are
neglected by utilitarians as well). While utilitarianism and utilitarian welfare economics are
JUNE 1999
quite indifferent to the distribution of utilities
between different persons (concentrating, as
they do, only on the sum-total of utilities), the
new regime without any interpersonal comparisons in any form, further reduced the informational base on which social choice could draw.
The already-limited informational base of
Benthamite calculus was made to shrink even
further to that of Borda and Condorcet, since the
use of different persons’ utility rankings without any interpersonal comparison is analytically
quite similar to the use of voting information in
making social choice.
Faced with this informational restriction, utilitarian welfare economics gave way, from the
1940’s onwards, to a so-called “new welfare
economics,” which used only one basic criterion of social improvement, viz, the “Pareto
comparison.” This criterion only asserts that an
alternative situation would be definitely better if
the change would increase the utility of everyone.6 A good deal of subsequent welfare economics restricts attention to “Pareto efficiency”
only (that is, only to making sure that no further
Pareto improvements are possible). This criterion takes no interest whatever in distributional
issues, which cannot be addressed without considering conflicts of interest and of preferences.
Some further criterion is clearly needed for
making social welfare judgments with a greater
reach, and this was insightfully explored by
Abram Bergson (1938) and Paul A. Samuelson
(1947). This demand led directly to Arrow’s
(1950, 1951) pioneering formulation of social
choice theory, relating social preference (or decisions) to the set of individual preferences, and this
relation is called a “social welfare function.” Arrow (1951, 1963) went on to consider a set of very
mild-looking conditions, including: (1) Pareto efficiency, (2) nondictatorship, (3) independence
(demanding that social choice over any set of
alternatives must depend on preferences only over
those alternatives), and (4) unrestricted domain
(requiring that social preference must be a complete ordering, with full transitivity, and that this
must work for every conceivable set of individual
preferences).
Arrow’s impossibility theorem demonstrated
6
Or, at least, if it enhanced the utility of at least one
person and did not harm the interest of anyone.
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SEN: THE POSSIBILITY OF SOCIAL CHOICE
that it is impossible to satisfy these conditions
simultaneously.7 In order to avoid this impossibility result, different ways of modifying Arrow’s requirements were tried out in the
literature that followed, but other difficulties
continued to emerge.8 The force and widespread presence of impossibility results generated a consolidated sense of pessimism, and this
became a dominant theme in welfare economics
and social choice theory in general. Is this reading justified?
IV. Complementarity of Formal Methods and
Informal Reasoning
Before I proceed further on substantive matters, it may be useful to comment briefly on the
nature of the reasoning used in answering this
and related questions. Social choice theory is a
subject in which formal and mathematical techniques have been very extensively used. Those
who are suspicious of formal (and in particular,
of mathematical) modes of reasoning are often
skeptical of the usefulness of discussing realworld problems in this way. Their suspicion is
understandable, but it is ultimately misplaced.
The exercise of trying to get an integrated picture from diverse preferences or interests of
different people does involve many complex
problems in which one could be seriously misled in the absence of formal scrutiny. Indeed,
Arrow’s (1950, 1951, 1963) impossibility theorem—in many ways the “locus classicus” in this
7
There is also the structural assumption that there are at
least two distinct individuals (but not infinitely many) and at
least three distinct social states (not perhaps the most unrealistic of assumptions that economists have ever made). The
axioms referred to here are those in the later version of
Arrow’s theorem: Arrow (1963). Since the presentation here
is informal and permits some technical ambiguities, those
concerned with exactness are referred to the formal statements in Arrow (1963), or in Sen (1970a) or Fishburn
(1973) or Kelly (1978). Regarding proof, there are various
versions, including, of course, Arrow (1963). In Sen
(1995a) a very short—and elementary—proof is given. See
also Sen (1970a, 1979b), Blau (1972), Robert Wilson
(1975), Kelly (1978), Salvador Barberá (1980, 1983), Binmore (1994), and John Geanakopolous (1996), among other
variants.
8
For critical accounts of the literature, see Kelly (1978),
Feldman (1980), Pattanaik and Salles (1983), Suzumura
(1983), Hammond (1985), Walter P. Heller et al. (1986),
Sen (1986a, b), Mueller (1989), and Arrow et al. (1997).
353
field— can hardly be anticipated on the basis of
common sense or informal reasoning. This applies also to extensions of this result, for example to the demonstration that an exactly similar
impossibility to Arrow’s holds even without
any imposed demand of internal consistency of
social choice (see Sen, 1993a Theorem 3). In
the process of discussing some substantive issues in social choice theory, I shall have the
opportunity to consider various results which
too are not easily anticipated without formal
reasoning. Informal insights, important as they
are, cannot replace the formal investigations
that are needed to examine the congruity and
cogency of combinations of values and of apparently plausible demands.
This is not to deny that the task of widespread
public communication is crucial for the use of
social choice theory. It is centrally important for
social choice theory to relate formal analysis to
informal and transparent examination. I have to
confess that in my own case, this combination
has, in fact, been something of an obsession,
and some of the formal ideas I have been most
concerned with (such as an adequate framework
for informational broadening, the use of partial
comparability and of partial orderings, and the
weakening of consistency conditions demanded
of binary relations and of choice functions) call
simultaneously for formal investigation and for
informal explication and accessible scrutiny.9
Our deeply felt, real-world concerns have to be
substantively integrated with the analytical use
of formal and mathematical reasoning.
V. Proximity of Possibility and Impossibility
The general relationship between possibility
and impossibility results also deserves some
attention, in order to understand the nature and
role of impossibility theorems. When a set of
axioms regarding social choice can all be simultaneously satisfied, there may be several possible procedures that work, among which we have
to choose. In order to choose between the different possibilities through the use of discrimi9
In fact, in my main monograph in social choice
theory—Collective Choice and Social Welfare (Sen,
1970a), chapters with formal analysis (the “starred” chapters) alternate with chapters confined to informal discussion
(the “unstarred” chapters).
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THE AMERICAN ECONOMIC REVIEW
nating axioms, we have to introduce further
axioms, until only one possible procedure remains. This is something of an exercise in
brinkmanship. We have to go on cutting down
alternative possibilities, moving—implicitly—
towards an impossibility, but then stop just before all possibilities are eliminated, to wit, when
one and only one option remains.
Thus, it should be clear that a full axiomatic
determination of a particular method of making
social choice must inescapably lie next door to
an impossibility—indeed just short of it. If it
lies far from an impossibility (with various positive possibilities), then it cannot give us an
axiomatic derivation of any specific method of
social choice. It is, therefore, to be expected that
constructive paths in social choice theory, derived from axiomatic reasoning, would tend to
be paved on one side by impossibility results
(opposite to the side of multiple possibilities).
No conclusion about the fragility of social
choice theory (or its subject matter) emerges
from this proximity.
In fact, the literature that has followed Arrow’s work has shown classes of impossibility
theorems and of positive possibility results, all
of which lie quite close to each other.10 The real
issue is not, therefore, the ubiquity of impossibility (it will always lie close to the axiomatic
derivation of any specific social choice rule),
but the reach and reasonableness of the axioms
to be used. We have to get on with the basic task
of obtaining workable rules that satisfy reasonable requirements.
10
See Hansson (1968, 1969a, 1969b, 1976), Sen (1969,
1970a, 1977a, 1993a), Schwartz (1970, 1972, 1986), Pattanaik (1971, 1973), Alan P. Kirman and Dieter Sondermann (1972), Mas-Colell and Sonnenschein (1972), Wilson
(1972, 1975), Fishburn (1973, 1974), Plott (1973, 1976),
Brown (1974, 1975), John A. Ferejohn and Grether (1974),
Binmore (1975, 1994), Salles (1975), Blair et al. (1976),
Georges A. Bordes (1976, 1979), Donald E. Campbell
(1976), Deb (1976, 1977), Parks (1976a, b), Suzumura
(1976a, b, 1983), Blau and Deb (1977), Kelly (1978), Peleg
(1978, 1984), Blair and Pollak (1979, 1982), Blau (1979),
Bernard Monjardet (1979, 1983), Barberá (1980, 1983),
Chichilnisky (1982a, b), Chichilnisky and Heal (1983),
Moulin (1983), Kelsey (1984, 1985), Vincenzo Denicolò
(1985), Yasumi Matsumoto (1985), Aizerman and Aleskerov (1986), Taradas Bandyopadhyay (1986), Isaac Levi
(1986), and Campbell and Kelly (1997), among many other
contributions.
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VI. Majority Decisions and Coherence
In the discussion so far, I have made no
attempt to confine attention to particular configurations of individual preferences, ignoring others. Formally, this is required by Arrow’s
condition of “unrestricted domain,” which insists that the social choice procedure must work
for every conceivable cluster of individual preferences. It must, however, be obvious that, for
any decision procedure, some preference profiles will yield inconsistencies and incoherence
of social decisions while other profiles will not
produce these results.
Arrow (1951) himself had initiated, along
with Black (1948, 1958), the search for adequate restrictions that would guarantee consistent majority decisions. The necessary and
sufficient conditions for consistent majority decisions can indeed be identified (see Sen and
Pattanaik, 1969).11 While much less restrictive
than the earlier conditions that had been identified, they are still quite demanding; indeed it is
shown that they would be easily violated in
many actual situations.
The formal results on necessary or sufficiency
conditions of majority decisions can only give as
much hope—or generate as much disappointment—about voting-based social choice as the
extent of social cohesion and confrontation (in the
actual patterns of individual preferences) would
allow. Choice problems for the society come in
many shapes and sizes, and there may be less
comfort in these results for some types of social
choice problems than for others. When distributional issues dominate and when people seek to
11
See also Ken-ichi Inada (1969, 1970), who has been a
major contributor to this literature. See also William S.
Vickrey (1960), Benjamin Ward (1965), Sen (1966, 1969),
Sen and Pattanaik (1969), and Pattanaik (1971). Other types
of restrictions have also been considered to yield consistent
majority decisions; see Michael B. Nicholson (1965), Plott
(1967), Gordon Tullock (1967), Inada (1970), Pattanaik
(1971), Otto A. Davis et al. (1972), Fishburn (1973), Kelly
(1974a, b, 1978), Pattanaik and Sengupta (1974), Eric S.
Maskin (1976a, b, 1995), Jean-Michel Grandmont (1978),
Peleg (1978, 1984), Wulf Gaertner (1979), Dutta (1980),
Chichilnisky and Heal (1983), and Suzumura (1983),
among other contributions. Domain restrictions for a wider
class of voting rules have been investigated by Pattanaik
(1970), Maskin (1976a, b, 1995), and Ehud Kalai and E.
Muller (1977). The vast literature has been definitively
surveyed by Gaertner (1998).
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SEN: THE POSSIBILITY OF SOCIAL CHOICE
maximize their own “shares” without concern for
others (as, for example, in a “cake division” problem, with each preferring any division that increases her own share, no matter what happens to
the others), then majority rule will tend to be
thoroughly inconsistent. But when there is a matter of national outrage (for example, in response to
the inability of a democratic government to prevent a famine), the electorate may be reasonably
univocal and thoroughly consistent.12 Also, when
people cluster in parties, with complex agendas
and dialogues, involving give and take as well as
some general attitudes to values like equity or
justice, the ubiquitous inconsistencies can yield
ground to more congruous decisions.13
So far as welfare economics is concerned,
majority rule and voting procedures are particularly prone to inconsistency, given the centrality of distributional issues in welfare-economic
problems. However, one of the basic questions
to ask is whether voting rules (to which social
choice procedures are effectively restricted in
the Arrovian framework) provide a reasonable
approach to social choice in the field of welfare
economics. Are we in the right territory in trying to make social welfare judgments through
variants of voting systems?
VII. Informational Broadening and
Welfare Economics
Voting-based procedures are entirely natural
for some kinds of social choice problems, such as
12
This is one reason why no famine has ever occurred in
an independent and democratic country (not run by alienated rulers, or by a dictator, or by a one-party state). See Sen
(1984), Drèze and Sen (1989), Frances D’Souza (1990),
Human Rights Watch (1992), and Red Cross and Red Crescent Societies (1994).
13
On different aspects of this general political issue, see
Arrow (1951), James M. Buchanan (1954a, b), Buchanan
and Tullock (1962), Sen (1970a, 1973c, 1974, 1977d,
1984), Suzumura (1983), Hammond (1985), Pattanaik and
Salles (1985), Andrew Caplin and Barry Nalebuff (1988,
1991), Young (1988), and Guinier (1991), among other
writings, and also the “Symposium” on voting procedures in
the Journal of Economic Perspectives (Winter 1995), with
contributions by Jonathan Levin and Nalebuff (1995),
Douglas W. Rae (1995), Nicolaus Tideman (1995), Robert
J. Weber (1995), Michel Le Breton and John Weymark
(1996), and Suzumura (1999), among others.
355
elections, referendums, or committee decisions.14
They are, however, altogether unsuitable for many
other problems of social choice.15 When, for example, we want to get some kind of an aggregative index of social welfare, we cannot rely on
such procedures for at least two distinct reasons.
First, voting requires active participation, and if
someone decides not to exercise her voting right,
her preference would find no direct representation
in social decisions. (Indeed, because of lower participation, the interests of substantial groups—for
example of African Americans in the United
States—find inadequate representation in national
politics.) In contrast, in making reasonable social
welfare judgments, the interests of the less assertive cannot be simply ignored.
Second, even with the active involvement of
every one in voting exercises, we cannot but be
short of important information needed for welfare-economic evaluation (on this see Sen,
1970a, 1973a). Through voting, each person can
rank different alternatives. But there is no direct
way of getting interpersonal comparisons of
different persons’ well-being from voting data.
We must go beyond the class of voting rules
(explored by Borda and Condorcet as well as
Arrow) to be able to address distributional
issues.
Arrow had ruled out the use of interpersonal
comparisons since he had followed the general
consensus that had emerged in the 1940’s that
(as Arrow put it) “interpersonal comparison of
14
There are, however, some serious problems arising
from a possible lack of correspondence between votes and
actual preferences, which could differ because of strategic
voting aimed at manipulation of voting results. On this see
the remarkable impossibility theorem of Gibbard (1973) and
Satterthwaite (1975). There is an extensive literature on
manipulation and on the challenges of implementation, on
which see also Pattanaik (1973, 1978), Steven J. Brams
(1975), Ted Groves and John Ledyard (1977), Barberá and
Sonnenschein (1978), Dutta and Pattanaik (1978), Peleg
(1978, 1984), Schmeidler and Sonnenschein (1978), Dasgupta et al. (1979), Green and Laffont (1979), Laffont
(1979), Dutta (1980, 1997), Pattanaik and Sengupta (1980),
Sengupta (1980a, b), Laffont and Maskin (1982), Moulin
(1983, 1995), and Leo Hurwicz et al. (1985), among other
contributions. There is also a nonstrategic impossibility in
establishing an exact one-to-one correspondence between:
(1) preferring, (2) dispreferring, and (3) being indifferent,
on the one hand, and (1*) voting for, (2*) voting against,
and (3*) abstaining, on the other hand, no matter whether
voting is costly, or enjoyable, or neither (see Sen, 1964).
15
On this, see Sen (1970a, 1977a).
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utilities has no meaning” (Arrow, 1951 p. 9).
The totality of the axiom combination used by
Arrow had the effect of confining social choice
procedures to rules that are, broadly speaking,
of the voting type.16 His impossibility result
relates, therefore, to this class of rules.
To lay the foundations of a constructive social choice theory, if we want to reject the
historical consensus against the use of interpersonal comparisons in social choice, we have to
address two important—and difficult— questions. First, can we systematically incorporate
and use something as complex as interpersonal
comparisons involving many persons? Will this
be a territory of disciplined analysis, rather than
a riot of confusing (and possibly confused)
ideas? Second, how can the analytical results be
integrated with practical use? On what kind of
information can we sensibly base interpersonal
comparisons? Will the relevant information be
actually available, to be used?
The first is primarily a question of analytical
system building, and the second that of epistemology as well as practical reason. The latter
issue requires a reexamination of the informational basis of interpersonal comparisons, and I
would presently argue that it calls for an inescapably qualified response. But the first question can be addressed more definitively through
16
It should be explained that restricting social choice
procedures to voting rules is not an assumption that is
invoked by Arrow (1951, 1963); it is a part of the impossibility theorem established by him. It is an analytical consequence of the set of apparently reasonable axioms
postulated for reasoned social choice. Interpersonal comparison of utilities is, of course, explicitly excluded, but the
proof of Arrow’s theorem shows that a set of other assumptions with considerable plausibility, taken together, logically entail other features of voting rules as well (a
remarkable analytical result on its own). The derived features include, in particular, the demanding requirement that
no effective note be taken of the nature of the social states:
only of the votes that are respectively cast in favor of—and
against—them (a property that is often called “neutrality”—a somewhat flattering name for what is after all only
an informational restriction). While the eschewal of interpersonal comparisons of utilities eliminates the possibility
of taking note of inequality of utilities (and of differences in
gains and losses of utilities), the entailed component of
“neutrality” prevents attention being indirectly paid to distributional issues through taking explicit note of the nature
of the respective social states (for example, of the income
inequalities in the different states). The role of induced
informational constraints in generating impossibility results
is discussed in Sen (1977c, 1979b).
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constructive analysis. Without going into technicalities of the literature that has emerged, I
would like to report that interpersonal comparisons of various types can be fully axiomatized
and exactly incorporated in social choice procedures (through the use of “invariance conditions” in a generalized framework, formally
constructed as “social welfare functionals,” on
which see Sen, 1970a, 1977c).17 Indeed, interpersonal comparisons need not even be confined to “all-or-none” dichotomies. We may be
able to make interpersonal comparisons to some
extent, but not in every comparison, nor of
every type, nor with tremendous exactness (see
Sen, 1970a, c).
We may, for example, have no great difficulty in accepting that Emperor Nero’s utility
gain from the burning of Rome was smaller than
the sum-total of the utility loss of all the other
Romans who suffered from the fire. But this
does not require us to feel confident that we can
put everyone’s utilities in an exact one-to-one
correspondence with each other. There may,
thus, be room for demanding “partial comparability”— denying both the extremes: full comparability and no comparability at all. The
different extents of partial comparability can be
given mathematically exact forms (precisely articulating the exact extent of inexactness).18 It
can also be shown that there may be no general
need for terribly refined interpersonal comparisons for arriving at definite social decisions.
Quite often, rather limited levels of partial comparability will be adequate for making social
decisions.19 Thus the empirical exercise need
not be as ambitious as it is sometimes feared.
Before proceeding to the informational basis
of interpersonal comparisons, let me ask a big
17
See also Patrick Suppes (1966), Hammond (1976,
1977, 1985), Stephen Strasnick (1976), Arrow (1977),
d’Aspremont and Gevers (1977), Maskin (1978, 1979),
Gevers (1979), Kevin W. S. Roberts (1980a, b), Suzumura
(1983, 1997), Charles Blackorby et al. (1984), d’Aspremont
(1985), and d’Aspremont and Philippe Mongin (1998),
among other contributions.
18
See Sen (1970a, c), Blackorby (1975), Ben J. Fine
(1975a), Kaushik Basu (1980), T. Bezembinder and P. van
Acker (1980), and Levi (1986). The study of inexactness
can also be extended to “fuzzy” characterizations.
19
See also Anthony B. Atkinson (1970), Sen (1970a, c,
1973a), Dasgupta et al. (1973), and Michael Rothschild and
Joseph E. Stiglitz (1973).
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analytical question: how much of a change in
the possibility of social choice is brought about
by systematic use of interpersonal comparisons? Does Arrow’s impossibility, and related
results, go away with the use of interpersonal
comparisons in social welfare judgments? The
answer briefly is, yes. The additional informational availability allows sufficient discrimination to escape impossibilities of this type.
There is an interesting contrast here. It can be
shown that admitting cardinality of utilities
without interpersonal comparisons does not
change Arrow’s impossibility theorem at all,
which can be readily extended to cardinal measurability of utilities (see Theorem 8*2 in Sen,
1970a). In contrast even ordinal interpersonal
comparisons is adequate to break the exact impossibility. We knew of course that with some
types of interpersonal comparisons demanded
in a full form (including cardinal interpersonal
comparability), we can use the classical utilitarian approach.20 But it turns out that even weaker
forms of comparability would still permit making consistent social welfare judgments, satisfying all of Arrow’s requirements, in addition to
being sensitive to distributional concerns (even
though the possible rules will be confined to a
relatively small class).21
The distributional issue is, in fact, intimately
connected with the need to go beyond voting
rules as the basis of social welfare judgments.
As was discussed earlier, utilitarianism too is in
an important sense distribution indifferent: its
program is to maximize the sum-total of utilities, no matter how unequally that total may be
distributed (the extensive implications of this
distributional indifference are discussed in Sen,
1973a). But the use of interpersonal comparisons can take other forms as well, allowing
public decisions to be sensitive to inequalities
in well-being and opportunities.
The broad approach of social welfare func20
On this, see particularly John C. Harsanyi’s (1955)
classic paper, which stood against the pessimistic literature
that followed Arrow’s (1951) impossibility theorem. See
also James A. Mirrlees (1982).
21
See Sen (1970a, 1977c), Rawls (1971), Edmund S.
Phelps (1973), Hammond (1976), Strasnick (1976), Arrow
(1977), d’Aspremont and Gevers (1977), Gevers (1979),
Roberts (1980a, b), Suzumura (1983, 1997), Blackorby
et al. (1984), and d’Aspremont (1985), among other contributions.
357
tionals opens up the possibility of using many
different types of social welfare rules, which
differ in the treatment of equity as well as
efficiency, and also in their informational requirements.22 Further, with the removal of the
artificial barrier that had prohibited interpersonal comparisons, many other fields of normative measurement have also been investigated
with the axiomatic approach of social welfare
analysis. My own efforts in such fields as the
evaluation and measurement of inequality (Sen,
1973a, 1992a, 1997b), poverty (Sen, 1976b,
1983b, 1985a, 1992a), distribution-adjusted
national income (Sen, 1973b, 1976a, 1979a),
and environmental evaluation (Sen, 1995a),
have drawn solidly on the broadened informational framework of recent social choice
theory.23
VIII. Informational Basis of Interpersonal
Comparisons
While the analytical issues in incorporating
interpersonal comparisons have been, on the
whole, well sorted out, there still remains the
important practical matter of finding an adequate approach to the empirical discipline of
making interpersonal comparisons and then using them in practice. The foremost question to
be addressed is this: interpersonal comparison
of what?
The formal structures of social welfare functions are not, in any sense, specific to utility
comparisons only, and they can incorporate
other types of interpersonal comparisons as
well. The principal issue is the choice of some
22
On this and related issues, see Sen (1970a, 1977c),
Hammond (1976), d’Aspremont and Gevers (1977), Robert
Deschamps and Gevers (1978), Maskin (1978, 1979),
Gevers (1979), Roberts (1980a), Siddiqur R. Osmani
(1982), Blackorby et al. (1984), d’Aspremont (1985), T.
Coulhon and Mongin (1989), Nick Baigent (1994), and
d’Aspremont and Mongin (1998), among many other contributions. See also Harsanyi (1955) and Suppes (1966) for
pioneering analyses of the uses of interpersonal comparisons. Elster and John Roemer (1991) have provided fine
critical accounts of the vast literature on this subject.
23
My work on inequality (beginning with Sen, 1973a)
has been particularly influenced by the pioneering contributions of Atkinson (1970, 1983, 1989). The literature on this
subject has grown very fast in recent years; for a critical
scrutiny as well as references to the contemporary literature,
see James Foster and Sen (1997).
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THE AMERICAN ECONOMIC REVIEW
accounting of individual advantage, which need
not take the form of comparisons of mental
states of happiness, and could instead focus on
some other way of looking at individual wellbeing or freedom or substantive opportunities
(seen in the perspective of a corresponding evaluative discipline).
The rejection of interpersonal comparisons of
utilities in welfare economic and in social
choice theory that followed positivist criticism
(such as that of Robbins, 1938) was firmly
based on interpreting them entirely as comparisons of mental states. As it happens, even with
such mental state comparisons, the case for unqualified rejection is hard to sustain.24 Indeed,
as has been forcefully argued by the philosopher
Donald Davidson (1986), it is difficult to see
how people can understand anything much
about other people’s minds and feelings, without making some comparisons with their own
minds and feelings. Such comparisons may not
be extremely precise, but then again, we know
from analytical investigations that very precise
interpersonal comparisons may not be needed to
make systematic use of interpersonal comparisons in social choice (on this and related issues,
see Sen, 1970a, c, 1997b; Blackorby, 1975).
So the picture is not so pessimistic even in the
old home ground of mental state comparisons.
But, more importantly, interpersonal comparisons of personal welfare, or of individual advantage, need not be based only on comparisons
of mental states. In fact, there may be good
ethical grounds for not concentrating too much
24
If interpersonal comparisons are taken to be entirely a
matter of opinions or of value judgments, then the question
can also be raised as to how the divergent opinions or
valuations of different persons may be combined together
(this looks like a social choice exercise on its own). Roberts
(1995) has extensively investigated this particular formulation, taking interpersonal comparison to be an exercise of
aggregation of opinions. If, however, interpersonal comparisons are taken to have a firmer factual basis (e.g., some
people being objectively more miserable than others), then
the use of interpersonal comparisons will call for a different
set of axiomatic demands—more appropriate for epistemology than for ethics. For contrasting perspectives on interpersonal comparisons of well-being, see Ian Little (1957),
Sen (1970a, 1985b), Tibor Scitovsky (1976), Donald Davidson (1986), and Gibbard (1986); see also empirical studies of observed misery (for example, Drèze and Sen, 1989,
1990, 1995, 1997; Erik Schokkaert and Luc Van Ootegem,
1990; Robert M. Solow, 1995).
JUNE 1999
on mental-state comparisons—whether of pleasures or of desires. Utilities may sometimes be
very malleable in response to persistent deprivation. A hopeless destitute with much poverty,
or a downtrodden laborer living under exploitative economic arrangements, or a subjugated
housewife in a society with entrenched gender
inequality, or a tyrannized citizen under brutal
authoritarianism, may come to terms with her
deprivation. She may take whatever pleasure
she can from small achievements, and adjust her
desires to take note of feasibility (thereby helping the fulfilment of her adjusted desires). But
her success in such adjustment would not make
her deprivation go away. The metric of pleasure
or desire may sometimes be quite inadequate in
reflecting the extent of a person’s substantive
deprivation.25
There may indeed be a case for taking incomes, or commodity bundles, or resources
more generally, to be of direct interest in judging a person’s advantage, and this may be so for
various reasons—not merely for the mental
states they may help to generate.26 In fact, the
Difference Principle in Rawls’s (1971) theory
of “justice as fairness” is based on judging
individual advantage in terms of a person’s
command over what Rawls calls “primary
goods,” which are general-purpose resources
that are useful for anyone to have no matter
what her exact objectives are.
This procedure can be improved upon by
taking note not only of the ownership of primary goods and resources, but also of interpersonal differences in converting them into the
capability to live well. Indeed, I have tried to
argue in favor of judging individual advantage
in terms of the respective capabilities, which the
25
This issue and its far-reaching ethical and economic
implications are discussed in Sen (1980, 1985a, b). See also
Basu et al. (1995).
26
The welfare relevance of real income comparisons can
be dissociated from their mental-state correlates; see Sen
(1979a). See also the related literature on “fairness,” seen in
terms of nonenvy; for example, Duncan Foley (1967),
Serge-Christophe Kolm (1969), Elisha A. Pazner and David
Schmeidler (1974), Hal R. Varian (1974, 1975), Lars-Gunnar Svensson (1977, 1980), Ronald Dworkin (1981), Suzumura (1983), Young (1985), Campbell (1992), and Moulin
and William Thomson (1997). Direct social judgments on
interpersonal distributions over commodities have been analyzed by Franklin M. Fisher (1956).
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SEN: THE POSSIBILITY OF SOCIAL CHOICE
person has, to live the way he or she has reason
to value.27 This approach focuses on the substantive freedoms that people have, rather than
only on the particular outcomes with which they
end up. For responsible adults, the concentration on freedom rather than only achievement
has some merit, and it can provide a general
framework for analyzing individual advantage
and deprivation in a contemporary society. The
extent of interpersonal comparisons may only
be partial— often based on the intersection of
different points of view.28 But the use of such
partial comparability can make a major difference to the informational basis of reasoned social judgments.
However, given the nature of the subject and
the practical difficulties of informational availability and evaluation, it would be overambitious to be severely exclusive in sticking only to
one informational approach, rejecting all others.
In the recent literature in applied welfare economics, various ways of making sensible interpersonal comparisons of well-being have
emerged. Some have been based on studying
expenditure patterns, and using this to surmise
about comparative well-being of different persons (see Pollak and Terence J. Wales, 1979;
Dale W. Jorgenson et al., 1980; Jorgenson,
1990; Daniel T. Slesnick, 1998), while others
have combined this with other informational
inputs (see Angus S. Deaton and John Muellbauer, 1980; Atkinson and Francois Bourguignon, 1982, 1987; Fisher, 1987, 1990;
27
See Sen (1980, 1985a, b, 1992a), Drèze and Sen
(1989, 1995), and Martha Nussbaum and Sen (1993). See
also Roemer (1982, 1996), Basu (1987), Nussbaum (1988),
Richard J. Arneson (1989), Atkinson (1989, 1995), G. A.
Cohen (1989, 1990), F. Bourguignon and G. Fields (1990),
Keith Griffin and John Knight (1990), David Crocker
(1992), Sudhir Anand and Martin Ravallion (1993), Arrow
(1995), Meghnad Desai (1995), and Pattanaik (1997),
among other contributions. There have also been several
important symposia on the capability perspective, such as
Giornale degli Economisti e Annali di Economia (1994) and
Notizie di Politeia (1996, Special Volume), including contributions by Alessandro Balestrino (1994, 1996), Giovanni
Andrea Cornia (1994), Elena Granaglia (1994, 1996), Enrica Chiappero Martinetti (1994, 1996), Sebastiano Bavetta
(1996), Ian Carter (1996), Leonardo Casini and Iacopo
Bernetti (1996), and Shahrashoub Razavi (1996); see also
Sen (1994, 1996b) with my responses to these contributions.
28
On this, see Sen (1970a, c, 1985b, 1992a, 1999a, b).
359
Pollak, 1991; Deaton, 1995).29 Others have
tried to use questionnaires and have looked for
regularities in people’s answers to questions
about relative well-being (see, for example,
Arie Kapteyn and Bernard M. S. van Praag,
1976).
There have also been illuminating works in
observing important features of living conditions and in drawing conclusions on quality of
life and comparative living standards on that
basis; indeed there is a well-established tradition of Scandinavian studies in this area (see,
for example, Allardt et al. [1981] and Robert
Erikson and Rune Aberg [1987]). The literature
on “basic needs” and their fulfilment has also
provided an empirical approach to understanding comparative deprivations.30 Further, under
the intellectual leadership of Mahbub ul Haq
(1995), the United Nations Development Programme (UNDP) has made systematic use of a
particular type of informational broadening to
make comparisons based on observed features
of living conditions (reported in UNDP, Human
Development Reports).31
It is easy enough to pick holes in each of
these methodologies and to criticize the related
metrics of interpersonal comparisons. But there
can be little doubt about the welfare-economic
interest in the far-reaching uses of empirical
information that have emerged from these
works. They have substantially broadened our
understanding of individual advantages and
their empirical correlates. Each of these methodologies clearly has some limitations as well
as virtues, and our evaluation of their relative
merits may well diverge, depending on our respective priorities. I have had the occasion to
argue elsewhere (and briefly also in this lecture,
29
See also Slesnick (1998).
A good introduction to the basic needs approach can
be found in Paul Streeten et al. (1981). See also Irma
Adelman (1975), Dharam Ghai et al. (1977), James P. Grant
(1978), Morris D. Morris (1979), Chichilnisky (1980),
Nanak Kakwani (1981, 1984), Paul Streeten (1984), Frances
Stewart (1985), Robert Goodin (1988), and Alan Hamlin
and Phillip Pettit (1989), among other contributions. Focusing on the fulfillment of “minimum needs” can be traced to
Pigou (1920).
31
See for example United Nations Development Programme (1990) and the subsequent yearly Human Development Reports. See also Sen (1973b, 1985a), Adelman
(1975), Grant (1978), Morris (1979), Streeten et al. (1981),
Desai (1995), and Anand and Sen (1997) on related issues.
30
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THE AMERICAN ECONOMIC REVIEW
earlier on) in favor of partial comparabilities
based on evaluation of capabilities,32 but beyond that specific issue (on which others may
well take a different view), I want to emphasize
here the more general point that the possibilities
of practical welfare economics and social
choice have been immensely widened through
these innovative, empirical works.
In fact, despite their differences, they fit in
general into the overall pattern of informational widening to which recent analytical
work in social choice theory has forcefully
pointed. The analytical systems explored in
the recent literature on welfare economics and
social choice are broader than those in the
Arrovian model (and correspondingly less
uptight, and less “impossible,” on which see
Sen, 1970a, 1977c).33 They are also analytically general enough to allow different
empirical interpretations and to permit alternative informational bases for social choice.
The diverse empirical methodologies, considered here, can all be seen in this broader
analytical perspective. The movements in
“high theory” have been, in this sense, closely
linked to the advances in “practical economics.” It is the sustained exploration of constructive possibilities—at the analytical as
well as practical levels—that has helped to
dispel some of the gloom that was associated
earlier with social choice and welfare
economics.
IX. Poverty and Famine
The variety of information on which social
welfare analysis can draw can be well illustrated
by the study of poverty. Poverty is typically
seen in terms of the lowness of incomes, and it
has been traditionally measured simply by
counting the number of people below the poverty-line income; this is sometimes called the
head-count measure. A scrutiny of this approach yields two different types of questions.
First, is poverty adequately seen as low income?
32
See particularly Sen (1992a).
The literature on “implementation” has also grown in
the direction of practical application; for analyses of some
of the different issues involved, see Laffont (1979), Maskin
(1985), Moulin (1995), Suzumura (1995), Dutta (1997), and
Maskin and Tomas Sjöström (1999).
33
JUNE 1999
Second, even if poverty is seen as low income,
is the aggregate poverty of a society best characterized by the index of the head-count
measure?
I take up these questions in turn. Do we get
enough of a diagnosis of individual poverty by
comparing the individual’s income with a socially given poverty-line income? What about
the person with an income well above the poverty line, who suffers from an expensive illness
(requiring, say, kidney dialysis)? Is deprivation
not ultimately a lack of opportunity to lead a
minimally acceptable life, which can be influenced by a number of considerations, including
of course personal income, but also physical
and environmental characteristics, and other
variables (such as the availability and costs of
medical and other facilities)? The motivation
behind such an exercise relates closely to seeing
poverty as a serious deprivation of certain basic
capabilities. This alternative approach leads to a
rather different diagnosis of poverty from the
ones that a purely income-based analysis can
yield.34
This is not to deny that lowness of income
can be very important in many contexts, since
the opportunities a person enjoys in a market
economy can be severely constrained by her
level of real income. However, various contingencies can lead to variations in the “conversion” of income into the capability to live
a minimally acceptable life, and if that is what
we are concerned with, there may be good
reason to look beyond income poverty. There
are at least four different sources of variation:
(1) personal heterogeneities (for example,
proneness to illness), (2) environmental diversities (for example, living in a storm-prone
or flood-prone area), (3) variations in social
climate (for example, the prevalence of crime
or epidemiological vectors), and (4) differences in relative deprivation connected with
customary patterns of consumption in particular societies (for example, being relatively
impoverished in a rich society, which can lead
34
See Sen (1980, 1983b, 1985a, 1992a, 1993b, 1999a),
Kakwani (1984), Nussbaum (1988), Drèze and Sen (1989,
1995), Griffin and Knight (1990), Iftekhar Hossain (1990),
Schokkaert and Van Ootegem (1990), Nussbaum and Sen
(1993), Anand and Sen (1997), and Foster and Sen (1997),
among other contributions.
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SEN: THE POSSIBILITY OF SOCIAL CHOICE
to deprivation of the absolute capability to
take part in the life of the community).35
There is, thus, an important need to go beyond income information in poverty analysis, in
particular to see poverty as capability deprivation. However (as was discussed earlier), the
choice of the informational base for poverty
analysis cannot really be dissociated from pragmatic considerations, particularly informational
availability. It is unlikely that the perspective of
poverty as income deprivation can be dispensed
with in the empirical literature on poverty, even
when the limitations of that perspective are entirely clear. Indeed, in many contexts the roughand-ready way of using income information
may provide the most immediate approach to
the study of severe deprivation.36
For example, the causation of famines is often best seen in terms of a radical decline in the
real incomes of a section of the population,
leading to starvation and death (on this see Sen,
1976d, 1981).37 The dynamics of income earning and of purchasing power may indeed be the
most important component of a famine investigation. This approach, in which the study of
causal influences on the determination of the
respective incomes of different groups plays a
central part, contrasts with an exclusive focus
on agricultural production and food supply,
35
On this see Sen (1992a) and Foster and Sen (1997).
The last concern—that a relative deprivation of income can
lead to an absolute deprivation of a basic capability—was
first discussed by Adam Smith (1776). Adam Smith’s claim
that “necessary goods” (and correspondingly minimum incomes needed to avoid basic deprivation) must be defined
differently for different societies also suggests a general
approach of using a parametrically variable “poverty-line”
income. Such variations can be used to reflect the disparate
conditions of different persons (including, for example,
proneness to illness). On these issues, see Deaton and
Muellbauer (1980, 1986), Jorgenson (1990), Pollak (1991),
Deaton (1995), and Slesnick (1998), among other contributions. Under certain conditions, the definition of poverty as
having an income below the parametrically determined
“poverty line” will be congruent with the characterization of
poverty as capability deprivation (if the parametric variations are firmly linked to the income needed to avoid specified levels of capability deprivation).
36
These issues are insightfully scrutinized by Philippe
Van Parijs (1995).
37
See also Mohiuddin Alamgir (1980), Ravallion
(1987), Drèze and Sen (1989, 1990), Jeffrey L. Coles and
Hammond (1995), Desai (1995), Osmani (1995), and Peter
Svedberg (1999), on related matters.
361
which is often found in the literature on this
subject.
The shift in informational focus from food supply to entitlements (involving incomes as well as
supply, and the resulting relative prices) can make
a radical difference, since famines can occur even
without any major decline—possibly without any
decline at all—of food production or supply.38 If,
for example, the incomes of rural wage laborers,
or of service providers, or of craftsmen collapse
through unemployment, or through a fall of real
wages, or through a decline in the demand for the
relevant services or craft products, the affected
groups may have to starve, even if the overall food
supply in the economy is undiminished. Starvation occurs when some people cannot establish
entitlement over an adequate amount of food,
through purchase or through food production, and
the overall supply of food is only one influence
among many in the determination of the entitlements of the respective groups of people in the
economy. Thus, an income-sensitive entitlement
approach can provide a better explanation of famines than can be obtained through an exclusively
production-oriented view. It can also yield a more
effective approach to the remedying of starvation
and hunger (on this see particularly Drèze and
Sen, 1989).
The nature of the problem tends to identify
the particular “space” on which the analysis has
to concentrate. It remains true that in explaining
the exact patterns of famine deaths and sufferings, we can get additional understanding by
supplementing the income-based analysis with
information on the conversion of incomes into
nourishment, which will depend on various
other influences such as metabolic rates, proneness to illness, body size, etc.39 These issues are
38
As empirical studies of famines bring out, some actual
famines have occurred with little or no decline in food
production (such as the Bengal famine of 1943, the Ethiopian famine of 1973, or the Bangladesh famine of 1974),
whereas others have been influenced substantially by declines in food production (on this see Sen, 1981).
39
An important further issue is the distribution of food
within the family, which may be influenced by several
factors other than family income. Issues of gender inequality and the treatment of children and of old people can be
important in this context. Entitlement analysis can be extended in these directions by going beyond the family
income into the conventions and rules of intrafamily division. On these issues, see Sen (1983b, 1984, 1990),
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THE AMERICAN ECONOMIC REVIEW
undoubtedly important for investigating the incidence of nutritional failures, morbidities, and
mortalities. However, in a general analysis of
the occurrence and causation of famines, affecting large groups, these additional matters may
be of secondary importance. While I shall not
enter further into the famine literature here, I
would like to emphasize that the informational
demands of famine analysis give an important
place to income deprivation which have more
immediacy and ready usability than the more
subtle—and ultimately more informed— distinctions based on capability comparisons (on
this see Sen [1981] and Drèze and Sen [1989]).
I turn now to the second question. The most
common and most traditional measure of poverty had tended to concentrate on head counting. But it must also make a difference as to
how far below the poverty line the poor individually are, and furthermore, how the deprivation is shared and distributed among the poor.
The social data on the respective deprivations of
the individuals who constitute the poor in a
society need to be aggregated together to arrive
at informative and usable measures of aggregate
poverty. This is a social choice problem, and
axioms can indeed be proposed that attempt to
capture our distributional concerns in this constructive exercise (on this see Sen, 1976b).40
Several distribution-sensitive poverty measures have been derived axiomatically in the
recent social choice literature, and various alternative proposals have been analyzed. While I
shall, here, not go into a comparative assessment of these measures (nor into axiomatic requirements that can be used to discriminate
between them), elsewhere I have tried to address this issue, jointly with James Foster (Foster and Sen, 1997).41 However, I would like to
Vaughan (1987), Drèze and Sen (1989), Barbara Harriss
(1990), Bina Agarwal (1994), Nancy Folbre (1995), Kanbur
(1995), and Nussbaum and Jonathan Glover (1995), among
other contributions.
40
The so-called “Sen measure of poverty” can, in fact,
be improved by an important but simple variation illuminatingly proposed by Anthony F. Shorrocks (1995). I have
to confess favoring the “Sen-Shorrocks measure” over the
original “Sen index.”
41
James Foster is a major contributor to the poverty
literature; see, for example, Foster (1984), Foster et al.
(1984), and Foster and Shorrocks (1988). For discussions of
some major issues in the choice of an aggregative measure
JUNE 1999
emphasize the fact that we face here an embarrassment of riches (the opposite of an impasse
or an impossibility), once the informational basis of social judgments has been appropriately
broadened. To axiomatize exactly a particular
poverty measure, we shall have to indulge in the
“brinkmanship” of which I spoke earlier (Section V), by adding other axiomatic demands
until we are just short of an impossibility, with
only one surviving poverty measure.
X. Comparative Deprivation and
Gender Inequality
At one level, poverty cannot be dissociated
from the misery caused by it, and in this sense,
the classical perspective of utility also can be
invoked in this analysis. However, the malleability of mental attitudes, on which I commented earlier, may tend to hide and muffle the
extent of deprivation in many cases. The indigent peasant who manages to build some cheer
in his life should not be taken as nonpoor on
grounds of his mental accomplishment.
This adaptability can be particularly important in dealing with gender inequality and deprivation of women in traditionally unequal
societies. This is partly because perceptions
have a decisive part to play in the cohesion of
family life, and the culture of family living
tends to put a premium on making allies out of
the ill treated. Women may— often enough—
work much harder than men (thanks to the rigours of household chores), and also receive
less attention in health care and nutrition, and
yet the perception that there is an incorrigible
of poverty, see also Anand (1977, 1983), Blackorby and
Donaldson (1978, 1980), Kanbur (1984), Atkinson (1987,
1989), Christian Seidl (1988), Satya R. Chakravarty (1990),
Camilo Dagum and Michele Zenga (1990), Ravallion
(1994), Frank A. Cowell (1995), and Shorrocks (1995),
among many others (there is an extensive bibliography of
this large literature in Foster and Sen, 1997). One of the
important issues to be addressed is the need for—and limitations of—“decomposability” (and the weaker requirement of “subgroup consistency,” on which see also
Shorrocks, 1984). Foster (1984) gives arguments in favor of
decomposability (as did Anand, 1977, 1983), whereas Sen
(1973a, 1977c) presents arguments against it. There is a
serious attempt in Foster and Sen (1997) to assess both the
pros and the cons of decomposability and subgroup consistency.
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SEN: THE POSSIBILITY OF SOCIAL CHOICE
inequality here may well be missing in a society
in which asymmetric norms are quietly dominant.42 This type of inequality and deprivation
may not, under these circumstances, adequately
surface in the scale of the mental metric of
dissatisfaction and discontent.
The socially cultivated sense of contentment
and serenity may even affect the perception of
morbidity and illness. When, many years ago, I
was working on a famine-related study of postfamine Bengal in 1944, I was quite struck by the
remarkable fact that the widows surveyed had
hardly reported any incidence of being in “indifferent health,” whereas widowers, complained massively about just that (Sen, 1985a
Appendix B). Similarly, it emerges in interstate
comparisons in India that the states that are
worst provided in education and health-care facilities typically report the lowest levels of perceived morbidity, whereas states with good
health care and school education indicate higher
self-perception of illness (with the highest morbidity reports coming from the best provided
states, such as Kerala).43 Mental reactions, the
mainstay of classical utility, can be a very defective basis for the analysis of deprivation.
Thus, in understanding poverty and inequality, there is a strong case for looking at real
deprivation and not merely at mental reactions
to that deprivation. There have been many recent investigations of gender inequality and
women’s deprivation in terms of undernutrition,
clinically diagnosed morbidity, observed illiteracy, and even unexpectedly high mortality
(compared with physiologically justified expectations).44 Such interpersonal comparisons can
42
On this see Sen (1984, 1990, 1993c), and the literature
cited there.
43
The methodological issue underlying this problem involves “positional objectivity”—what is observationally objective from a given position but may not be sustainable in
interpositional comparisons. This contrast and its far-reaching relevance is discussed in Sen (1993c).
44
The literature on “missing women” (in comparison
with the expected number of women in the absence of
unusually high feminine mortality rates found in some societies) is one example of such empirical analysis; on this
see Sen (1984, 1992c), Vaughan (1987), Drèze and Sen
(1989, 1990), Ansley J. Coale (1991), and Stephan Klasen
(1994). See also Jocelyn Kynch and Sen (1983); Harriss
(1990); Ravi Kanbur and Lawrence Haddad (1990); Agarwal (1994); Folbre (1995); Nussbaum and Glover (1995),
among other works.
363
easily be a significant basis of studies of poverty
and of inequality between the sexes. They can
be accommodated within a broad framework of
welfare economics and social choice (enhanced
by the removal of informational constraints that
would rule out the use of these types of data).
XI. The Liberal Paradox
This lecture has included discussion of why and
how impossibility results in social choice can be
overcome through informational broadening. The
informational widening considered so far has been
mainly concerned with the use of interpersonal
comparisons. But this need not be the only form of
broadening that is needed in resolving an impasse
in social choice. Consider, for example, an impossibility theorem which is sometimes referred to as
“the liberal paradox,” or “the impossibility of the
Paretian liberal” (Sen, 1970a, b, 1976c). The theorem shows the impossibility of satisfying even a
very minimal demand for liberty when combined
with an insistence on Pareto efficiency (given unrestricted domain).45
Since there have been some debates on the
content of liberty in the recent literature (see, for
example, Nozick, 1974; Peter Gärdenfors, 1981;
Robert Sugden, 1981, 1985, 1993; Hillel Steiner,
1990; Gaertner et al., 1992; Deb, 1994; Marc
Fleurbaey and Gaertner, 1996; Pattanaik, 1996;
Suzumura, 1996), perhaps a quick explanatory
remark may be useful. Liberty has many different
aspects, including two rather distinct features: (1)
it can help us to achieve what we would choose to
achieve in our respective private domains, for
example, in personal life (this is its “opportunity
aspect”), and (2) it can leave us directly in charge
of choices over private domains, no matter what
we may or may not achieve (this is its “process
aspect”). In social choice theory, the formulation
of liberty has been primarily concerned with the
former, that is, the opportunity aspect. This may
have been adequate to show the possible conflict
between the Pareto principle and the opportunity
aspect of liberty (on which Sen [1970a, b] concentrated), but an exclusive concentration on the
45
There is also some analytical interest in the “source”
of the impossibility result involved here, particularly since
both “Pareto efficiency” and “minimal liberty” are characterized in terms of the same set of preferences of the same
individuals. On this see Sen (1976c, 1992b).
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THE AMERICAN ECONOMIC REVIEW
opportunity aspect cannot provide an adequate
understanding of the demands of liberty (in this
respect, Sugden [1981, 1993] and Gaertner et al.
[1992] were certainly right to reject the sufficiency
of the opportunity-centered formulation in standard social choice theory).46 However, social
choice theory can also be made to accommodate
the process aspect of liberty through appropriate
recharacterization, and particularly through valuing due process in addition to substantive opportunities (on this see Sen, 1982b, 1997a, 1999b;
Stig Kanger, 1985; Deb, 1994; Hammond, 1997;
Suzumura, 1996; Martin van Hees, 1996).
It is also important to avoid the opposite narrowness of concentrating exclusively only on the process
aspect of liberty, as some recent writers have preferred to do. Important as processes are, this cannot
obliterate the relevance of the opportunity aspect
which too must count. Indeed, the importance of
effectiveness in the realization of liberty in one’s
personal life has been recognized as important for a
long time—even by commentators deeply concerned with processes, from John Stuart Mill (1859)
to Frank Knight (1947), Friedrich A. Hayek (1960),
and Buchanan (1986). The difficulties of having to
weigh process fairness against effectiveness of outcomes cannot be avoided simply by ignoring the
opportunity aspect of liberty, through an exclusive
concentration on the process aspect.47
How might the conflict of the Paretian liberal, in
particular, be resolved? Different ways of dealing
with this friction have been explored in the literature.48 However, it is important to see that unlike
46
The “impossibility of the Paretian liberal” does not,
however, get resolved simply by concentrating on the process aspect of liberty, on which see Friedrich Breyer (1977),
Breyer and Gardner (1980), Sen (1983b, 1992b), Basu
(1984), Gaertner et al. (1992), Deb (1994), Binmore (1996),
Mueller (1996), Pattanaik (1996), and Suzumura (1996).
47
On these issues, see Hammond (1997) and also Seidl
(1975, 1997), Breyer (1977), Kanger (1985), Levi (1986),
Charles K. Rowley (1993), Deb (1994), Suzumura (1996),
and Pattanaik (1997).
48
See, for example, Seidl (1975, 1997), Suzumura (1976b,
1983, 1999), Gaertner and Lorenz Krüger (1981, 1983), Hammond (1982, 1997), John L. Wriglesworth (1985), Levi (1986),
and Jonathan Riley (1987), among others. See also the symposium on the “‘Liberal Paradox” in Analyse & Kritik (September
1996), including: Binmore (1996), Breyer (1996), Buchanan
(1996), Fleurbaey and Gaertner (1996), Anthony de Jasay and
Hartmut Kliemt (1996), Kliemt (1996), Mueller (1996), Suzumura (1996), and van Hees (1996). My own suggestions are
presented in Sen (1983a, 1992b, 1996a).
JUNE 1999
Arrow’s impossibility result, the liberal paradox cannot be satisfactorily resolved through the use of interpersonal comparisons. Indeed, neither the claims
of liberty, nor that of Pareto efficiency, need be
significantly contingent on interpersonal comparisons. The force of one’s claims over one’s private
domain lies in the personal nature of that choice—
not on the relative intensities of the preferences of
different persons over a particular person’s private
life. Also, Pareto efficiency depends on the congruence of different persons’ preferences over a pairwise choice—not on the comparative strength of
those preferences.
Rather, the resolution of this problem lies
elsewhere, in particular in the need to see each
of these claims as being qualified by the importance of the other— once it is recognized that
they can be in possible conflict with each other
(indeed, the main point of the liberal paradox
was precisely to identify that possible conflict).
The recognition of the importance of effective
liberty in one’s private domain (precisely over
particular choices) can coexist with an acknowledgement of the relevance of Paretian unanimity over any pair (over all choices—whether in
one’s private domain or not). A satisfactory
resolution of this impossibility must include
taking an evaluative view of the acceptable priorities between personal liberty and overall desire fulfillment, and must be sensitive to the
information regarding the trade-offs on this that
the persons may themselves endorse. This too
calls for an informational enrichment (taking
note of people’s political values as well as individual desires), but this enrichment is of a
rather different kind from that of using interpersonal comparisons of well-being or overall
advantage.49
XII. A Concluding Remark
Impossibility results in social choice theory—
led by the pioneering work of Arrow (1951)—
have often been interpreted as being thoroughly
destructive of the possibility of reasoned and democratic social choice, including welfare economics
49
This may, formally, require a multistage social choice
exercise in the determination of these priorities, followed by
the use of those priorities in the choice over comprehensive
social states (on these issues, see Pattanaik, 1971; Sen,
1982b, 1992b, 1996, 1997a; Suzumura, 1996, 1999).
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SEN: THE POSSIBILITY OF SOCIAL CHOICE
(Sections I–III, XI). I have argued against that
view. Indeed, Arrow’s powerful “impossibility
theorem” invites engagement, rather than resignation (Sections IV–V). We do know, of course, that
democratic decisions can sometimes lead to incongruities. To the extent that this is a feature of
the real world, its existence and reach are matters
for objective recognition. Inconsistencies arise
more readily in some situations than in others, and
it is possible to identify the situational differences
and to characterize the processes through consensual and compatible decisions can emerge (Sections VI–VIII).
The impossibility results certainly deserve
serious study. They often have wide—indeed
sweeping—reach, not merely covering day-today politics (where we may be rather used to
incongruity), but also questioning the possibility of any assured framework for making social
welfare judgments for the society as a whole.
Impossibilities thus identified also militate
against the general possibility of an orderly and
systematic framework for normatively assessing inequality, for evaluating poverty, or for
identifying intolerable tyranny and violations of
liberty. Not to be able to have a coherent framework for these appraisals or evaluations would
indeed be most damaging for systematic political, social, and economic judgement. It would
not be possible to talk about injustice and unfairness without having to face the accusation
that such diagnoses must be inescapably arbitrary or intellectually despotic.
These bleak conclusions do not, however,
endure searching scrutiny, and fruitful procedures that militate against such pessimism can
be clearly identified. This has indeed been
largely an upbeat lecture— emphasizing the
possibility of constructive social choice theory,
and arguing for a productive interpretation of
the impossibility results. Indeed, these apparently negative results can be seen to be helpful
inputs in the development of an adequate framework for social choice, since the axiomatic derivation of a specific social choice procedure
must lie in between—and close to—an impossibility, on one side, and an embarrassment of
riches, on the other (see Section V).
The possibility of constructive welfare economics and social choice (and their use in making social welfare judgments and in devising
practical measures with normative significance)
365
turns on the need for broadening the informational basis of such choice. Different types of
informational enrichment have been considered
in the literature. A crucial element in this broadening is the use of interpersonal comparisons of
well-being and individual advantage. It is not
surprising that the rejection of interpersonal
comparisons must cause difficulties for reasoned social decision, since the claims of different persons, who make up the society, have
to be assessed against each other. We cannot
even understand the force of public concerns
about poverty, hunger, inequality, or tyranny,
without bringing in interpersonal comparisons
in one form or another. The information on
which our informal judgments on these matters
rely is precisely the kind of information that has
to be—and can be—incorporated in the formal
analysis of systematic social choice (Sections
VII–XI).
The pessimism about the possibility of interpersonal comparisons that fuelled the “obituary
notices” for welfare economics (and substantially fed the fear of impossibility in social
choice theory) was ultimately misleading for
two distinct reasons. First, it confined attention
to too narrow an informational base, overlooking the different ways in which interpersonally
comparative statements can sensibly be made
and can be used to enrich the analysis of welfare
judgments and social choice. An overconcentration on comparisons of mental states crowded
out a plethora of information that can inform us
about the real advantages and disadvantages of
different persons, related to their substantive
well-being, freedoms, or opportunities. Second,
the pessimism was also based on demanding too
much precision in such comparisons, overlooking the fact that even partial comparisons can
serve to enlighten the reasoned basis of welfare economics, social ethics, and responsible
politics.50
Addressing these problems fits well into a
general program of strengthening social choice
theory (and “nonobituarial” welfare economics).
50
There are two distinct issues here. First, partial comparability can be very effective in generating an optimal
choice (Sen, 1970a, c). Second, even when an optimal alternative does not emerge, it can help to narrow down the
maximal set of undominated alternatives to which a maximizing choice can be confined (Sen 1973a, 1993a, 1997a).
366
THE AMERICAN ECONOMIC REVIEW
In general, informational broadening, in one
form or another, is an effective way of overcoming social choice pessimism and of avoiding impossibilities, and it leads directly
to constructive approaches with viability and
reach. Formal reasoning about postulated axioms (including their compatibility and coherence), as well as informal understanding of
values and norms (including their relevance and
plausibility), both point in that productive direction. Indeed, the deep complementarity between
formal and informal reasoning—so central to
the social sciences—is well illustrated by developments in modern social choice theory.
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